Gottex Fund Management’s entire product line posted positive performance for March year to date, according to the firm’s trading statement for Q1 2013.
Total fee-earning assets for the group decreased by 9.0 per cent to USD6.41bn compared to USD7.0bn at 31 December 2012, as a result of client outflows, partly offset by new inflows in Asia of USD150m and the acquisition of a majority interest in Frontier Investment Management (subject to regulatory approval) and positive performance.
Gottex’s second market neutral product is expected to regain its high water mark in Q2 2013 and will then start accruing performance fees, following the return to its high water mark of Gottex’s largest market neutral fund last August.
Gottex signed an agreement to acquire a majority in UK-based Frontier Investment Management, allowing the company to offer broad range of liquid multi-asset products.
The company has a solid balance sheet with no debt and substantial cash reserves of USD34.5m.
Joachim Gottschalk (pictured), chairman and chief executive, says: “The global financial rally has continued to enhance hedge fund returns. Alternative investments including hedge funds will play an increasing role when institutional and retail investors substantially decrease their holdings in long bond portfolios; investors are already noticeably turning their attention to absolute return products. We anticipate good demand for multi-asset products with a much higher alternatives component like our Multi Asset Endowment Fund and Frontier’s liquid multi-asset products.
“Many of our products have accrued incentive fees during the first quarter. This has contributed to a Q1 cash flow positive operating result for the company. In addition, we are getting closer to accruing incentive fees for our second market neutral product. Market volatility, however, remains and ongoing strong positive performance is not a given.
“Despite the various positive signs, investors are still hesitant to make significant asset allocation decisions, but activity has picked up. As a company, we look forward to the completion and integration of Frontier Investment Management, allowing us to offer our clients a broad range of liquid and low cost multi-asset products.”